Aroon Indicator

The Aroon indicator is used to help traders know when a market is uptrending, downtrending, or is in a range-bound, trendless market.

Knowing when a market is trending is very useful, mainly because trend following technical analysis indicators are profitable during trending markets but cause losses during non-directional markets. Similarly, oscillators are extremely profitable indicators during range-bound markets, but perform very poorly during strong trending markets. The Aroon indicator can show which mode the market is in.

The chart of the Nasdaq 100 shows the different modes of the market and how the Aroon indicator reacts to these different market modes:

Interpreting the Aroon Indicator

When the Aroon Down indicator (in red above) is above the 70 line and the Aroon Up indicator (in greed above) is below 30, then the market is trending downwards.

In contrast, when the Aroon Up indicator is above the 70 line and the Aroon Down indicator is below 30, then the market is trending strongly upwards.

When the Aroon Up and Aroon Down indicator move towards the centerline (50), then the market is entering into a consolidation period.

By varying the period length, the Aroon indicator can give long term indications of trend or short-term indications of trend. By default, the Aroon indicator is 25-periods (shown in the chart above), but a shorter time frame could be 10-periods.

Aroon indicator that combines both the Aroon Up and Aroon Down is presented on the Aroon Oscillator.

Become a Better Trader

It is a well documented fact that within the “business” of trading the financial markets, as much as 90 % of the participants lose and continue to lose money. So if 90 % are losing, that therefore means that 10% are gaining each and every time.

In order to improve my own trading record, I deliberately set out to try and discover what it was I had to do to become one of the 10% (The Winners) who are consistently making money from the unfortunate remaining 90% (The Losers) who don’t.

My research and investigations was to speak to as many successful traders as I could, to read as many articles, publications and books which have been written by successful traders. It wasn’t until I started my research, that I quickly realised just how much has been and no doubt will continue to be written about trading and the psychology of trading. What is even more astounding is the amount that has been written by so called “gurus” who actually haven’t made any significant amounts of money from a business that they are supposed to be experts in. I will tell you about some of my findings relating to these authors in future articles.

It is my intention to publish my findings in a series of articles over the next 3 months and I hope you can learn and improve your own trading from implementing the information which I release.

I personally trade the FOREX market now but I have tried trading stocks, futures, commodities and options. I will be covering the reasons for concentrating on FOREX in a later article but in the meantime let me tell you about one of my many discoveries.

Every one of the successful traders I interviewed, stressed the importance of keeping a journal of their trades. They would record the date, time, what they traded, buy or sell, price, indicators used including levels and/or figures, trends (long, medium and short) and an overall description of why they took the trade. It was also imperative that the journal entry included notes about the trade after the event. If it made money what was the criteria, and if it was a losing trade, why had it turned out to be like this and any contributing factors.

Now comes the interesting part. Everyone of them stated that they regularly reviewed their journal (some weekly and some monthly) but everyone quite categorically looked back over past trades. No doubt learning from their mistakes and to improve and repeat on their successful trades.

Trading is very disciplined with definite rules for entering and exiting trades. These rules must be adhered to at all times and one of the rules is entering all details about the trade in the journal, making no exceptions.

I hope you will all learn something from this and if you aren’t already maintaining a record of your trades, then please start doing so from now on. Also regularly go back over your records on a regular basis.

7 Easy Tips: Trading Style and Trading Strategies in Forex Software

As you may know, Forex is a profitable but risky form of investment, which is why many investors are interested in minimizing risks by trading with the help of a Forex Expert Advisor or automated trading robot.

A trader can reap many benefits from using a FX robot. If you want to improve your profitability in the Forex market do some research and look for best option there is for you out there...

What Forex investors really want is to complement their trading strategies or to automate the task. Oftentimes new investors experience frustration when trying to find the right FX trading system, because they can't find one that suits their trading style...

So today we'll go over 7 easy tips on how to look for those automated trading robots that complement your trading style with the right set of strategies:

* When you're on the look our for your trading robot, check if the sales page says what their trading robot does or how it does it. If the website is not very clear or you can't find answers to your technical questions read between the lines the information again and contact the developers if you have specific questions...if you can't get answers I suggest you continue your search somewhere else...

* What if you want to adjust the settings in order to have more control over your trades? Depending on you degree of knowledge and trading strategies you may need more "flexibility". If you would like to have more control over your trades then your best bet could be a system that allows you to do partial manual trading and get more involved, look for a good Expert Advisor.

* Make sure that the software has the capability of analyzing the market. You have to look into the factors that make the products work.

* Some Forex robots would use bad money management strategies, so try to find out about that and avoid systems that show no solid proof of successful trades or haven't been updated for a long period of time.

* If you had bad experience with an automated system before try to get rid of the idea that all Forex trading programs are all scams. Be patient and keep looking for the ideal trading software for you.. Be determined to find the best Forex Expert Advisor there is and suits your level of expertise and trading style...

* The best forex trading system will count with a selection of different strategies that you can use in different market conditions and you need to make sure that they all (or most) suit the way that you want to trade. For example, your FX robot could have long and short term trading strategies, or one strategy for a choppy market and another for a stable market.

* Your want to focus on those systems that go along with your trading style and knowledge, and would probably work for you, and then narrow down your selection from there...

If you keep these tips in mind it will be easier for you to find really good Forex trading software...
And happy trading!

Author: Denis Marsili

Be A Forex Expert

Any one who has ventured into the real market place would definitely have an idea what a Forex is and share the many promises and possibilities this horizon can bring.

What Is Forex?

FOREX stands for the very popular Foreign Exchange Market. Sometimes, though, people associate it or equate it to mean also currencies.

Basically, forex is where people trade. The objects of the trading are the different foreign currencies. People buy and sell the currencies.

The exchange market and the trading as we know it today started in the 1970’s. It has no definite place. It has no definite location. The foreign exchange market is found wherever there is a financial center where people conduct constant exchanges and buying and selling.

To ensure definite success in this field, the main goal has to be kept in mind. The keywords to traders in the foreign exchange market are to ‘buy low and sell high.’ This is the way to get the profits coming in.

Why Are People Trading in the Forex?

More and more people are turning into the forex trading now. It has become popular once again and people want to enjoy the success this can bring.

There are also no strict requirements to join the market. Anybody can enter it and learn how to trade. Some even study beforehand to be prepared for the big trading.

Another good aspect about forex is the absence of too many fees to be able to join in. There are no commissions, no brokerage fees and no government fees.

The best thing by far is that trading can be done at home. Anyone can initiate a trade online. This spells big for people who stay at home, especially those who do not feel comfortable in engaging on online businesses. With proper training and computer with internet access at hand, success is within the bounds of the home.

How Does One Trade Successfully in the Foreign Exchange Market?

The purpose of ‘to buy low and to sell high’ must be kept in mind when trading in the forex. This will be the main vision of a trader to succeed.

The next task at hand is to know the trends. This means knowing when a particular currency will buy low or sell high. This is not mere prediction of possible turn of events.

Thus, forex requires strategies that have been tested to make sure that a decision will be profitable. There are two basic strategies employed in forex that one can learn from tutorials or from the actual exposure to the market.

The first strategy is the technical analysis.

This provides that a particular price chain reflects all the necessary information regarding the market. This entails a close analysis of the various aspects of the currency like the lowest and highest prices or the opening and closing prices.

The other strategy is the fundamental analysis.

As the name implies, it takes the overall situation. It focuses beyond the currency. It takes into account the situation of the country, economy, politics and even the rumors. Thus this requires more exposure and knowledge from the part of the trader.

Conclusion

The foreign exchange market promises so many possibilities to the trader. Many people may be interested in the forex but are only afraid to take the first step. This attitude should be turned around. Just have a good vision, take the necessary steps and make the forex venture a success.

All Rights Reserved, This content may be reprinted as long as it remains unchanged and the links are intact and active.

Arms Index (TRIN)

volume-based confirmation indicator as well as overbought and oversold indicator. The Arms Index has four components listed below:

1. Advancing Issues on the New York Stock Exchange (NYSE) - $ADV or $NYADV
2. Advancing Volume on the NYSE - $UVOL or $NYUPV
3. Declining Issues on the NYSE - $DECL or $NYDEC
4. Declining Volume on the NYSE - $DVOL or $NYDNV

The formula for the Arms Index is simply:

(Advancing Issues / Declining Issues) / (Advancing Volume / Declining Volume)
The intra-day 5-minute chart of the mini-Dow futures contract shows the $TRIN:























Interpreting the Arms Index
* Neutral Reading = 1
* Bearish Reading > 1
* Bullish Reading <>

The trend of the Arms Index is usually more important than whether or not the Arms Index is above or below 1. As can be seen in the intra-day chart above, when the mini-Dow was falling in price, the Arms Index was increasing. At 1.5, a very high Arms Index reading, a trader could take a contrarian stance and buy at the 1.5 level. Of course it would be advisable to see a reverse or bottoming of the Arms Index before taking such action. Also notice that when the mini-Dow is increasing, the Arms Index is increasing as well.

The Arms Index can be used from a longer term perspective. Some traders use moving averages of the inputs into the Arms Index equation. To illustrate: (10-day Moving Average (MA) of Advancing Issues / 10-day MA of Declining Issues) / (10-day MA of Advancing Volume / 10-day MA of Declining Volume) or one could simply take the 10-day Moving Average of the $TRIN.

There are fundamental problems with the Arms Index, and these probems are discussed on the next page.

Get started in Forex trading on the right foot ! Tips to end up in white-sand beaches!

As Forex trading becomes more and more popular as a way to make money online, many people are looking for information on currency trading made easy thinking that they can make a fortune almost overnight. Since it's also easy to get started because you just need a computer and a broadband connection, many find themselves reading training material on how to get started in order to get results...

Successful forex trading can only grow out of a strong desire to learn and master the skills of trading and from how you think and how you approach trades and transactions. It's really not an easy way to make money, at least not in the beginning... You can make your Forex trading easier by cutting down the learning curve. You'll be glad to know there's a a lot of things you can do...

For a beginner forex currency trading is a whole new crazy world... trading has huge potential and certainly does make some people rich, but you need to know what you're doing and have patience and a cool head. It's vital not to let your emotions or dreams of huge wealth make your decisions for you. It requires dedication, be determined and stick to your goals, try to learn the essentials and how to manage losses, we'll see into that in a second...

Of course there are easier ways to get into Forex, like signing up for a forex alerts or signals service, so they alert you when to trade, the moment to open a trade, close a trade, and sometimes they will advise on the stop loss position to manage your risk...another way is by using automated Forex trading robots, expert advisors.

Many beginners start out with a forex robot or expert advisor and if you can pick up one of the best ones and set it up right, this can be a good option. However, even if you choose to go ahead and have a robot trading for you, still try to be familiar with the basics of forex trading so as to understand the settings and manage your risk.

One thing that you must understand is that the perfect forex trading system, which makes money for all traders in all situations, simply does not exist. All systems have their good and bad runs, and suit some people's trading style better than others.

It is vital to test a system before you go live with it. This means both using a demo account before going live, and doing your own back tests, even if they have already been done for you. You need to know that you can operate your system correctly yourself. Avoid headaches and aggravation. Make good habits right from start, as time passes they became harder to break, and big part of your success depends on your mindset, how you approach Forex trading in general.

It's possible for new investors to make a lot of money very fast because the rates of exchange on the foreign market can rise and fall quickly. Making big money in a short time is what forex currency trading is all about! This means of course that it's also a risky, volatile market. Just like most things in life that have the potential of big returns, chances are you are going to have to face losses too. Some losses are inevitable, so you should manage your account so that you never risk too much on one trade. The best thing to do is make sure that the loss is as small as possible by using a stop loss.

If you apply these qualities to your foreign exchange training and practice, you may find that beginning forex trading is a life changing experience and there's no need to make it hard on yourself...you can get started with the right level of confidence. Finally, don't let dreams of drinks on white-sand beaches divert you from your strategy, but motivate you to keep trying instead. Be consistent and you'll be on your way to making your trading dreams come true!
About the Author:For more information on Forex Expert advisors: Easy Forex Advisor .
Denis is posting tips for new forex investors you may find useful if looking for Trading Forex Easy Strategies.

Advance Decline Line

The Advance Decline Line is used primarily to confirm price movement and detect divergences. The calculation of the Advance Decline Line is quite simple:

New York Stock Exchange (NYSE) Advancing Issues - NYSE Declining Issues

The calculated number is then added to the previous day's Advance Decline Line. To illustrate, say that todays advancing issues ($ADV or $NYADV) is 1,692 stocks. That is 1,692 stocks closed the day with an increase in their share price. The declining issues ($DECL or $NYDEC) is 1,311. At the NYSE, 1,311 closed the day with a decrease in their share price.

1,692 - 1,311 = +381

For the day, 381 more stocks closed the day higher than closed the day lower. This is a bullish sign. To continue the example, yesterday's Advance Decline Line totaled 45,874. Today's reading of +381 would be added to the total of yesterday. This would result in an updated total of 46,255.

Whether the total is positive or negative is irrelavent; what is relavent is the direction or the trend of the Advance Decline Line. An increasing Advance Decline Line is bullish because more stocks at the NYSE are closing the day with gains; whereas a decreasing Advance Decline Line is bearish because more stocks are closing the day with losses.

The Advance Decline Line is a powerful confirmation tool and divergence warning tool. The chart of the mini-Dow future contract of the Dow Jones Industrial Average or Dow 30 represents these confirmation and divergence signals:

High #1 to High #2
The mini-Dow future contract made a higher high at High #2; however, the Advance Decline Line failed to make a newer high, in fact it made a lower low. At High #2, less stocks were participating in the rally; thus, there was less strength behind the rally in the Dow Jones Industrial Average. This failure of the Advance Decline Line signaled a strong bearish divergence.

High #2 to High #3
This is an example of the Advance Decline Line confirming the trend in price of the mini-Dow future. The mini-Dow future made lower highs and likewise, the Advance Decline Ratio made lower highs.

Low #1 to Low #2
Yet another bearish divergence occured from Low #1 to Low #2. The mini-Dow futures contract made a higher low, an acknowledged bullish sign. However, the Advance Decline Line did not confirm the mini-Dow future's ascent. In fact, during the entire rally of the mini-Dow from Low #1 to Low #2, the Advance Decline Line was making lower lows. This bearish divergence signaled that stock investors and index futures traders should be wary of the recent increases; the market as a whole is not behind the recent move higher.

In conclusion, the Advance Decline Line is a very effective tool to confirm price action in stocks and stock indexes as well as signaling potential reversals or weak price moves. Another similar indicator is the Arms Index [TRIN]

Accumulative Swing Index

Developed by Welles Wilder in his popular technical analysis book New Concepts in Technical Trading Systems, the Accumulative Swing Index (ASI) is mainly used as a divergence and confirmation tool, but can be used for buy and sell signals as well. It was designed to be used for futures trading, but can be used for stock trading and currency trading too. Basically, the Accumulative Swing Index is a running total of the Swing Index.

The chart below of gold futures shows the Accumulative Swing Index:

Accumulative Swing Index as a Confirmation Tool

In the chart shown below, the Accumulative Swing Index confirmed Gold's downtrend. Subsequently, when Gold broke the downward trendline, the Accumulative Swing Index confirmed the trendline break as well.

Similarly, the upward move in the Gold futures contract was confirmed by the Accumulative Swing Index and the upward trendline break was confirmed too.

Buy Signal - Accumulative Swing Index

Buy when Accumulative Swing Index breaks above a downward trendline or, in a price consolidation period, above resistance.

Sell Signal - Accumulative Swing Index

Sell when the Accumulative Swing Index breaks below an upward trendline or, in a price consolidation period, below support.

In summary, the Accumulative Swing Index is best used as a confirmation tool with other technical indicators and charting patterns